Iryna Zhyhlei, PhD, Professor (iv_zhygley@ukr.net)
Zhytomyr Polytechnic State University, Ukraine
Iryna Zamula, PhD, Professor (zamula@ztu.edu.ua)
Zhytomyr Polytechnic State University, Ukraine
Vitalii Travin, PhD (travin@ztu.edu.ua)
Zhytomyr Polytechnic State University, Ukraine
Abstract
A significant number of agricultural producers, in order to get the maximum benefits from their activities, neglect important resources for mankind, i.e. natural. That is why every year the issue of increasing the efficiency of agricultural production with the obligatory reduction of anthropogenic pressure on the environment through the development of organic production becomes more acute.
The purpose of the study is to determine the payback period of the introduction of organic production by typical for Ukraine agricultural enterprise.
Although organic agriculture is a production system that has lower productivity, which leads to a decrease in the commodity mass of production, increases production costs. If we analyze the structure of the cost of organic production compared to traditional, it can be noted that it has much higher material costs, even though in organic production in general there is a decrease due to the abandonment of pesticides and fertilizers.
High profits in the organic technologies management is achieved due to the possibility of selling products at a price higher than traditional, both in domestic and foreign markets.
Thus, to stimulate the transition of agricultural enterprises of Ukraine to organic production is possible through the formation of methods for determining the payback period of organic production.
According to the results of the forecast, it is established that the payback of organic livestock introduced in 2020 in SLC (superadded liability company) “Terezine” will be observed from mid-2026 and by the end of the year will reach 2,000 euros. In the transition to organic production, efficiency increases mainly due to the higher selling price of organic products compared to traditional. Thus, in the first years of transition to organic production there is a significant decrease in production efficiency, which on average after 6 years begins to pay off, while the social and environmental effects of such production are formed immediately.
The modern paradigm of entrepreneurship is formed in such a way that a well-structured strategy for the transition to organic production, environmental and social responsibility of doing business become not only an indicator of image and prestige, but also the main source of potential profit as well as competitive status.
It is possible to stimulate the transition of Ukrainian agricultural enterprises to organic production through the established method of determining the payback period of organic production, which allows to predict in the development strategy of agricultural enterprises the possibility of obtaining the required level of efficiency through parallel traditional and organic production during the period until organic production becomes efficient.
Keywords: organic production, efficiency, net discounted income
JEL: M41, M49, Q23.
